SOFTS-Raw sugar edges lower, producer selling weighs
* Lower sugar prices stimulate demand
* Liffe certified cocoa stocks forecast to rise
(Adds details, quotes, updates prices)
LONDON, Jan 25 (Reuters) - Raw sugar futures on ICE eased towards a more than two-year low on Friday on producer selling ahead of a second consecutive large crop from Brazil.
Arabica coffee and cocoa futures on ICE were firm.
Origin selling weighed on contracts beyond the front-month on ICE raw sugar futures in anticipation of another bumper crop from top producer Brazil in 2013/14, helping March trade at a small premium to May <SB-1=R>, dealers said.
"Continued covering by trade and reported selling of forward months by producers have contributed to the strength," Nick Penney of brokerage Sucden Financial said, referring to March's premium.
March raw sugar futures on ICE were 0.06 cent or 0.3 percent lower at 18.43 cents a lb at 1234 GMT, after falling to 18.06 cents on Wednesday, the lowest level for the front-month since August 2010.
Dealers said lower prices had stimulated demand on the physical market. "There has been some decent offtake this week," said a London-based broker.
March white sugar on Liffe rose 20 cents or 0.04 percent to $487.50 per tonne. The contract dipped to $480.80 on Wednesday, the lowest level for the front month since June 2010.
COFFEE EDGES UP
March arabica coffee futures on ICE rose 1.00 cents or 0.7 percent to $1.4755 per lb, consolidating above December's two and a half year low of $1.4220 on a second month basis, after a week of erratic price moves.
Expectations for a record off-year crop in Brazil's biennial crop cycle were bearish for prices, with the government crop supply agency Conab forecasting Brazil will grow 47 million to 50.2 million 60-kg bags of coffee in the 2013/14 harvest.
"Conab officials are confident that improved cultivation methods and the planting of new higher-yield coffee shrubs will erode the differences between high and low-yield years," said Commerzbank in a commodities note.
Dealers monitored reports on coffee tree disease known as roya or leaf rust in Central America and Mexico.
Guatemala could declare a national emergency early next month to fight the spread of the fungus while Honduras has cut its 2012/13 coffee production estimate by 13.6 percent.
Commerzbank noted that Central America accounts for around 20 percent of world arabica production and the disease concerns should halt any further slide in prices.
March robusta coffee futures were $4 lower at $1,942 a tonne.
Certified coffee stocks held in NYSE Liffe nominated warehouses rose to 105,530 tonnes as of Jan. 21 from 104,860 tonnes on Jan. 7, exchange data showed.
Cocoa prices were little changed as good supply prospects from top growing region West Africa capped upside potential.
"It's a combination of the main crops seeming better than expected and mid crops looking good," said a European trader.
March cocoa futures on ICE nudged up $1 or 0.05 percent to $2,196 per tonne, with the market consolidating above Thursday's low of $2,178, the weakest level for the front month since July 2012.
May cocoa futures on Liffe were 1 pound lower at 1,445 pounds a tonne.
Dealers noted the flow of cocoa for gradings on the Liffe exchange had picked up, contributing to a weakening of the market structure, with March trading at a 6 pound discount to May after briefly trading at a premium <LRC-1=R>.
"If you look at the structure, the weakening of the March/May has been linked to the gradings," said a second trader.
"This will increase the number of certified stocks."
Valid cocoa stocks in NYSE Liffe's nominated warehouses rose to 44,020 tonnes as of Jan. 21 from 43,020 tonnes on Jan. 7, exchange data showed.
(Editing by James Jukwey)